Accountants Combined PI & Management Risks Policy

Transcription

1 Accountants Combined PI & Management Risks Policy Schedule Policy No: The Assured: Address: Professional Business: Limit of Indemnity: Insuring Clause 1 Each and every Claim or loss Costs & Expenses in addition Insuring Clause 2 In the aggregate, inclusive of Costs & Expenses Insuring Clause 3 In the aggregate, inclusive of Costs & Expenses Insuring Clause 4 In the aggregate Insuring Clause 5 In the aggregate Retention: Insuring Clause 1 Each and every Claim or loss Costs & Expenses in addition Insuring Clauses 2-3 Each and every Claim, inclusive of Costs & Expenses Insuring Clauses 4-5 Each and every Claim, inclusive of Costs & Expenses Period of Insurance: From: GMT To: GMT (both dates inclusive) Premium: Retroactive Date: Jurisdiction: Date of Proposal: Dated in London: Markel. Com. Act of 17

2 Insuring Clauses Each of the insuring clauses below are subject to the terms, limitations, exclusions and conditions of this Policy 1. Professional Business Liability Underwriters agree to indemnify (a) (b) (c) (d) (e) the Firm against all sums which it shall become legally liable to pay as damages and claimants costs as a result of any Claim first made against it during the Period of Insurance in respect of any civil liability whatsoever or whensoever arising incurred in the conduct of the Professional Business; the Firm for any loss which it first discovers to have sustained during the Period of Insurance by reason of any dishonest or fraudulent acts or omissions on the part of any former or present Insured Person or Employee of the Firm; the Firm against any Claim first made against it during the Period of Insurance in respect of third party liabilities as a consequence of Documents having been destroyed, damaged, lost or mislaid; the Firm against any amount paid and/or payable and/or the cost of taking any steps which the Firm is directed to take in relation to a Claimant in accordance with any final and binding award or determination of any Ombudsman (including Claimants costs) provided that the Claim giving rise to the award or determination of the Ombudsman was first made against the Firm during the Period of Insurance and that the Claim arose out of the conduct of the Professional Business. Nothing in this clause limits or restricts (or shall be construed as limiting or restricting) the scope of indemnity afforded by Insuring Clause 1(a). the Firm for Costs and Expenses 2. Employment Practices Liability Underwriters agree to pay on behalf of the Firm its Loss and Costs and Expenses arising from any Claim alleging a Wrongful Employment Act first made during the Period of Insurance. 3. Management Practices Liability Underwriters agree to pay on behalf of: a) the Insured Persons the Loss and Costs and Expenses arising from any Claim first made against them or any of them during the Period of Insurance alleging a Management Wrongful Act committed in their capacity as an Insured Person Markel. Com. Act of 17

3 except for and to the extent that the firm is required or permitted to indemnify them; or b) the Firm the Loss and Costs and Expenses arising from any Claim first made against the Insured Persons or any of them during the Period of Insurance alleging a Management Wrongful Act committed in their capacity as an Insured Person but only when and to the extent that the Firm is required or permitted to indemnify them. 4. Regulatory Costs Extension Underwriters agree to pay the reasonable professional costs and expenses incurred by the Firm with Underwriters prior written consent in responding to or defending (as the case may be) i) a formal investigation and/ or ii) an administrative or disciplinary proceeding arising from the conduct of the Professional Business of the Firm initiated by the AIDB, ICAEW or ACCA or an equivalent professional body, provided that such investigation or proceeding was commenced during the Period of Insurance and notified to Underwriters as soon as practicable after the commencement. 5. Criminal Costs Extension Underwriters agree to pay the reasonable professional costs and expenses incurred by the Firm with Underwriters prior written consent in responding to or defending (as the case may be) i) a formal investigation and/ or ii) criminal proceeding arising from the alleged commission of a criminal offence in connection with an auditors report pursuant to section 507 Companies Act 2006 (or equivalent legislation), provided that such investigation or criminal proceedings were commenced during the Period of Insurance and notified to Underwriters as soon as practicable after their commencement. Definitions (The following words shall have the same meaning throughout this Policy, whether expressed in the singular or the plural. Words in the masculine gender shall include the feminine.) Alternate shall mean any individual practitioner, partnership, limited liability partnership or company who is acting in connection with the arrangements to cover the incapacity or death of a sole practitioner. Change in Control shall mean where the Firm merges with another or is taken over by another entity, such that the Insured Persons no longer: Markel. Com. Act of 17

4 i) control the composition of the management or governing board of the resulting firm, or ii) iii) control more than half of the resulting firm s voting power, or contribute more than half of the capital account of the resulting firm. Claim For the purpose of Insuring Clause 1, shall mean any written communication or any formal document initiating a claim in a competent tribunal or court (or similar) that makes a demand for compensation or damages or an assertion of a right against the Firm (including any complaint or reference to any Ombudsman) that arises out of the conduct of Professional Business carried on by or on behalf of the Firm. For the purpose of Insuring Clause 2, shall mean any written communication or any formal document initiating a claim in a competent tribunal or court (or similar) that makes an allegation of a Wrongful Employment Act against the Firm. For the purpose of Insuring Clause 3, shall mean any written communication or any formal document initiating a claim in a competent tribunal or court (or similar) that makes an allegation of a Management Wrongful Act against any Insured Person. Computer shall mean any computer or other electronic data processing device, equipment or system, any hardware, software, programme, instruction, data or component utilised or intended to be utilised therein or thereby, or any actual or intended function of or process performed by any of the foregoing. Costs and Expenses shall mean the reasonable professional costs and expenses incurred with the Underwriters prior written consent, such consent not to be unreasonably withheld in the investigation, defence or settlement of any: Claim, which falls to be dealt with hereunder or any circumstances notified to Underwriters which may give rise to a Claim, that would fall to be dealt with hereunder. For the avoidance of doubt, they shall not mean any remuneration of whatsoever nature due to the Firm itself. Director Shall mean any natural person who was, is or shall become a director or officer of the Firm, within the meaning of any applicable law or regulation governing such matters. Document shall mean all documents excluding bearer bonds, coupons, currency, coins, bank notes, bullion, stamps, cheques, travellers cheques, drafts, postal orders, money orders, bills of exchange, promissory notes, securities, negotiable instruments and the like, and separable programmes, instructions or data for physical incorporation into any Computer Markel. Com. Act of 17

5 belonging to the Firm or for which the Firm is legally responsible, whilst in the custody of the Firm, or in the custody of any person to or with whom they have been entrusted, lodged or deposited by the Firm in the ordinary course of the Professional Business. Employee shall mean any person, other than an Insured Person who is or was: (iii) under a contract of service or apprenticeship with the Firm, or supplied to or hired or borrowed by the Firm, or under any work experience or similar scheme with the Firm 'Firm' shall mean, as at the date of the acts/ omissions giving rise to the Claim: (iii) (iv) (v) the Firm stated in the Schedule and any Subsidiary the Insured Persons the Employees in the event of the death, incompetence or bankruptcy of any natural person in and (iii) above, their estate, heirs, legal representatives or assigns for legal liabilities incurred by those within and (iii) above and Costs and Expenses which are indemnifiable under this Policy; an Alternate Insured Person shall mean the Members Partners or Directors Jurisdiction shall mean those territories stated in the Schedule. Loss shall mean the legal liability of the Firm arising from: i) the award by a competent court or tribunal (or similar) of compensation, damages or costs, including punitive or exemplary damages where insurance against liability to pay such punitive or exemplary damages is lawful under the laws of the territory in which the Claim is made; ii) settlements entered into with Underwriters prior written consent (such consent not to be unreasonably withheld); and Loss does not include: i) civil, regulatory or criminal fines or penalties; ii) iii) iv) remuneration or other benefits (either of a statutory or contractual nature) due to any Insured Person or Employee; any contractual or statutory redundancy payment; the costs of compliance with any order for reinstatement or any injunctive or other non-pecuniary relief, or any additional compensation for noncompliance with any such order; Markel. Com. Act of 17

6 vi) vii) the costs of adjusting or adapting any premises or methods of working to meet the needs of any person with a disability; or any matter which is uninsurable under English law. Management Wrongful Act shall mean any actual or alleged wrongful act or omission by the Insured Persons individually or collectively by reason of their acting in a managerial capacity in the Firm. It shall not mean any actual or alleged wrongful act or omission for breach of any professional duty. Related or continuous or repeated or causally connected Management Wrongful Acts shall constitute a single Management Wrongful Act. Member shall mean any natural person who was, is or shall become a member of the Firm, within the meaning of any applicable law or regulation governing such matters. Ombudsman shall mean any Ombudsman appointed pursuant to the provisions of the Financial Services and Markets Act 2000 or any amendment or re-enactment thereof. Partner shall mean any natural person who was, is or shall become a partner of the Firm, within the meaning of any applicable law or regulation governing such matters. Period of Insurance shall mean the period stated in the Schedule. Pollution shall mean any actual, alleged or threatened discharge, dispersal, release or escape of any solid, liquid, gaseous, or thermal irritant or contaminant including, but not limited to, smoke, vapours, soot, dust, fibres, fungi, viruses, bacteria, fumes, acids, alkalis, chemicals and waste (including, but not limited to material to be recycled, reconditioned or reclaimed). Premium shall mean the amount stated in the Schedule plus all applicable taxes at the rates from time to time in force. Professional Business shall mean the professional advice or services of the nature described in the Proposal given or performed by or on behalf of the Firm irrespective of whether or not a fee is charged, but provided that if a fee is charged in respect of such advice or service then that fee is taken into account in ascertaining the income of the Firm. The above definition of Professional Business shall be deemed to extend to any Insured Person whilst holding any individual personal appointment (including, but without prejudice to the generality of the forgoing, any appointment as a trustee or personal representative made or accepted in the course of the Firm s business), but whilst holding an appointment as company secretary or registrar or director, only in relation to the performance of Services as hereinafter defined. Proposal shall mean the written proposal bearing the date stated in the Schedule and containing particulars and statements together with any other information supplied to Underwriters. Markel. Com. Act of 17

7 Services performed whilst holding the appointment of company secretary, registrar or director as referred to in the definition of Professional Business shall mean all services performed or advice given by or on behalf of the Insured Person in connection with tax matters, secretarial work, share registration, financial advice to management, book-keeping, management accounting, financial investigation and reports, financial claims their negotiation and settlement, company formations, investment advice, insurance and pension scheme advice and computer consultancy. Subsidiary(ies) shall mean any other Firm specifically named in the Schedule or Proposal or in any endorsement to this Policy as a subsidiary. Terrorism shall mean the use of force or violence and/or the threat thereof, by any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear. Unlawful Association shall mean any organisation which is engaged in Terrorism and includes any organisation which at any relevant time is a proscribed organisation within the meaning of the Terrorism Act 2000 (UK) or any amendment or re-enactment thereof. War shall mean war, invasion, acts of foreign enemies, hostilities or warlike operations (whether war be declared or not), civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or amounting to an uprising, military or usurped power. Wrongful Employment Act shall mean: i) wrongful or unfair termination, whether actual or constructive, of the employment of, or demotion of, or failure or refusal to hire or promote, any natural person in violation of the law, whether common or statutory, or in breach of any agreement to commence or continue employment; or ii) iii) iv) employment discrimination, including any failure or refusal to hire any natural person, or discharge of, or other discrimination against, any natural person with respect to his remuneration or any of the terms, conditions or privileges of his employment, or any limitation, segregation or classification of any Employee or of applicants for employment in any way which would deprive or tend to deprive any natural person of employment opportunities or otherwise adversely affect his status as an Employee, because of such natural person s race, colour, religion or belief, age, gender or sexual orientation, national origin, disability, pregnancy, part time or fixed term status or other protected status; or harassment of an Employee on any protected grounds, including unwelcome sexual advances, requests for sexual favour or other verbal or physical conduct of a sexual nature; or failure to allow an Employee to exercise any rights under law; or v) victimisation or retaliatory treatment against an Employee on account of such Employee exercising or attempting to exercise his rights under law; or Markel. Com. Act of 17

8 vi) vii) breach of the express or implied terms of any contract of employment; or libel, slander or defamation of any Employee or negligent misrepresentation in any reference in respect of any Employee or any breach of the Data Protection Act 1998 in respect of the personal data of any Employee committed or allegedly committed by the Firm. Related or continuous or repeated or causally connected Wrong Employment Acts shall constitute a single Wrongful Employment Act. Limit And Retention For Insuring Clause 1: Underwriters liability to indemnify the Firm under insuring clause 1 shall not exceed the Limit of Indemnity stated in the Schedule, for each Claim or loss. For the purpose of the above all Claims and/or losses consequent upon or attributable to one originating source or cause shall be deemed to be one Claim and/or loss. Underwriters will pay Costs and Expenses in accordance with insuring clause 1 (e) in addition to the Limit of Indemnity subject to the following proviso. Where the Loss or loss exceeds the Limit of Indemnity then Underwriters liability for such Costs and Expenses shall be such proportion thereof as the available Limit of Indemnity bears to the amount of the Loss or loss. Underwriters shall only be liable in excess of the Retention (if any) stated in the Schedule, but this Retention does not apply to Costs and Expenses. For Insuring Clauses 2-5: Underwriters total aggregate liability for each of the insuring clauses 2-5, inclusive of Costs and Expenses, shall not exceed the Limit of Indemnity stated in the Schedule, irrespective of the number of Claims or investigations or proceedings. Underwriters shall only be liable, including for Costs and Expenses, in excess of the Retention (if any) stated in the Schedule for the relevant insuring clause. However, no Retention shall apply if a Claim is brought only against an Insured Person and that person is not indemnified by the Firm. (In that case, the Firm shall become liable to pay a sum equivalent to the Retention to the Underwriters). Other Insurance Underwriters shall have no liability where the Firm is entitled to an indemnity under any other insurance except in respect of any excess beyond the amount which would have been payable under such insurance had this Policy not been effected. Markel. Com. Act of 17

9 Exclusions (The heading of each exclusion is for ease of identification only) Underwriters shall have no liability where the Claim, loss or Loss (a) Circumstances Known At Inception arises from circumstances existing prior to the inception of this Policy and which the Firm knew or ought reasonably to have known might give rise to a Claim or loss. (b) Dishonest And Malicious Acts arises directly or indirectly from any dishonest or fraudulent act or omission committed by any person after the Firm had discovered, or should reasonably have discovered, that dishonesty or fraud. In addition, no person committing or condoning a dishonest or fraudulent act or omission shall be entitled to indemnity under this Policy. Furthermore, the following shall be deducted from any amount payable by Underwriters: (iii) any monies which but for such act or omission would be due from the Firm to the person committing or condoning such act; any monies held by the Firm and belonging to such person; any monies recovered following action in accordance with Condition 4 of this Policy. (c) Fines/Penalties is for a fine or penalty, punitive, exemplary, multiple, aggravated, restitutionary or noncompensatory damages save that: this exclusion will not apply to any Claim relating to any actual or alleged defamation arising out of the conduct of the Professional Business carried on by, or on behalf of the Firm; and this exclusion will not operate to exclude or limit (or be construed as excluding or limiting) the scope of indemnity afforded by Insuring Clause 1(d). (d) Bodily Injury is for bodily injury, psychological injury, anguish, emotional distress, shock, sickness, disease or death sustained by any person save that this exclusion will not apply to any Claim for psychological injury, emotional distress or anguish or shock which arises from: any actual or alleged breach of duty in the performance of (or failure to perform) Professional Business; or any Wrongful Employment Act. Markel. Com. Act of 17

10 (e) Property Damage is for any loss damage or destruction of property, including loss of use thereof. This exclusion does not apply to Insuring Clause 1(c). (f) Property arises directly or indirectly, from the ownership, possession or use by or on behalf of the Firm of any land, buildings, aircraft, watercraft, vessel or mechanically propelled vehicle. This exclusion does not apply to Insuring Clause 1(c). (g) products arises directly or indirectly, from goods or products sold, supplied, repaired, altered, manufactured, constructed, installed or maintained by the Firm or by any person, acting for or on behalf of the Firm. For the avoidance of doubt, the term 'goods' as referred to above shall apply to Packaged Software, but shall not apply to any other computer software or any amendments or adaptations of Packaged Software. Packaged Software shall mean any software produced by a third party that is marketed for general distribution on a wholesale or retail basis. For the avoidance of doubt, this exclusion shall not apply to any Claim or loss arising from amendments or adaptations made to Packaged Software by or on behalf of the Firm. (h) Contractual Liability arises directly or indirectly, from any liability assumed by the Firm under any express warranty (except warranty of authority), agreement or guarantee unless such liability would have attached to the Firm notwithstanding such express warranty, agreement or guarantee. Investment Warranties arises out of the giving of any express or implied warranty or guarantee relating to the financial return of any investment or portfolio of investments. (j) Trading Loss arises directly or indirectly, from any trading losses or liabilities or debts incurred by any business managed by or carried on by the Firm but this exclusion is not to apply to any claims made against the Firm for negligence in the normal course of their conduct of any receivership or procedures under the Insolvency Act (k) Consortia And Joint Ventures arises directly or indirectly, from the operation or existence of any joint venture or consortia in which the Firm has an interest unless Underwriters written agreement to the Firm s participation in such venture or consortia has been first obtained and an endorsement added to this Policy. Markel. Com. Act of 17

11 (l) Pension Scheme Liability arises directly or indirectly any pension or superannuation scheme or programme for the benefit of the Insured Persons or Employees (m) Insolvency/Bankruptcy Of Assured arises from the insolvency or bankruptcy of the Firm. (n) Computer Viruses And Unauthorised Use arises directly or indirectly from computer viruses or the failure to prevent unauthorised use of or access to any Computer. (p) Retroactive Date arises directly or indirectly from any act, error, event or omission occurring or alleged to have occurred prior to the Retroactive Date (if any) stated in the Schedule. (q) Legal Action where it is made in a court or tribunal outside the Jurisdiction or where action is brought in a court within the Jurisdiction to enforce a judgment made outside the Jurisdiction whether by way of reciprocal agreement or otherwise. (r) War And Terrorism arises directly or indirectly from: (iii) War Terrorism Any unlawful, wanton or malicious act committed by a person or persons acting on behalf of or in connection with any Unlawful Association regardless of any other cause or event contributing concurrently or in any other sequence to the Claim or loss. Also excluded is loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any action taken in controlling, preventing suppressing or in any way relating to and/or and/or (iii) above. If Underwriters allege by reason of this exclusion that any loss, damage, cost or expense is not covered by this Policy the burden of providing the contrary shall be upon the Firm. In the event that any part of this exclusion is found to be invalid or unenforceable, the remainder shall still be of full force and effect. Markel. Com. Act of 17

12 (s) Radioactive Contamination Or Explosive Nuclear Assemblies arises directly or indirectly from: ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel the radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof. (t) Pollution arises directly or indirectly from any Pollution save that this exclusion will not apply to any loss or any Claim which arises from any actual or alleged breach of duty in the performance of (or failure to perform) Professional Business. (u) Arranging Insurance arises directly from the failure of the Insured Persons to arrange or maintain the validity of any contract of insurance; (v) Claims By The Firm is made by the Firm unless it is: (iii) (iv) (v) brought by any liquidator, provisional liquidator, administrator or receiver (or equivalent) of the Firm or in respect of a Management Wrongful Act, but only once initiated by a formal arbitration notice or Claim Form (or writ/ summons or equivalent) issued in a competent court or in respect of a Wrongful Employment Act, but only once initiated by a formal notice or Claim Form (or writ/ summons or equivalent) issued in a competent tribunal or court or a derivative action brought in the name of the Firm and which is not actively solicited by the firm or the Insured Persons a claim for contribution or indemnity in relation to another claim emanating from an independent third party. Markel. Com. Act of 17

13 Conditions (The heading of each condition is for ease of identification only) 1. Claims Notification (a) (b) The Firm, as a condition precedent to their right to indemnity under this Policy, shall give to Underwriters written notice as soon as reasonably practicable and in any event during the Period of Insurance of (iii) (iv) any Claim, or the receipt of any notice of an intention to make a Claim, or any circumstances of which the Firm shall become aware which might reasonably be expected to give rise to a Claim, giving detailed reasons for the anticipation of such Claim or loss, together with full particulars as to dates and persons involved, or the discovery of reasonable cause for suspicion of dishonesty or fraud on the part of any former or present Insured Person, Employee, consultant, subcontractor or Alternate of the Firm, whether giving rise to a loss or claim hereunder or not, Such notice having been given as required by or (iii) above, any subsequent Claim made against the Firm shall be deemed to have been made during the Period of Insurance; and The Firm, as a condition precedent to their right to indemnity under this Policy, shall give Underwriters such information and co-operation as Underwriters may reasonably require including all reasonable assistance in identifying locations and securing the co-operation of any appropriate individual to sign a Statement of Truth or any other document necessary to comply with the Civil Procedure Rules current at the material time. 2. Claims Handling (a) (b) (c) The Firm, as a condition precedent to their right to indemnity under this Policy, shall not admit liability for or settle or attempt to settle any Claim or incur any costs and expenses in connection with any Claim or circumstance without Underwriters prior written consent (such consent not to be unreasonably withheld or delayed). Underwriters shall be entitled, but not obliged, at any time to take over and conduct in the name of the Firm or the Firm the defence, investigation or settlement of any Claim or circumstance or to prosecute in the name of the Firm for their own benefit any claim for payment, indemnity or damages or otherwise against any third party. The Firm shall not be required to contest any Claim unless Leading Counsel (to be mutually agreed upon by the Firm and Underwriters or, in default of agreement, to be appointed by the President for the time being of the Law Society) shall advise that such Claim should be contested. Markel. Com. Act of 17

14 (d) (e) (f) (g) Underwriters shall not settle any Claim without the consent of the Firm. If however the Firm shall refuse to consent to any settlement recommended by Underwriters and shall elect to contest a Claim, then Underwriters liability for such Claim (including costs and expenses) shall not exceed the amount for which the Claim could have been settled inclusive of costs and expenses incurred with their consent up to the date of such refusal, and then only up to the Limit of Indemnity stated in the Schedule. The Firm, as a condition precedent to their right to indemnity under this Policy, shall not, except insofar as may be required by law, disclose to anyone the existence of this Policy without Underwriters prior written consent. For the avoidance of doubt, a requirement to disclose the existence of this Policy is not a requirement to disclose its terms and conditions. Subject to Conditions 1(a) and (b) and 2(a) and (b) above compliance by the Firm with any rules, requirements, directions or guidance of any Ombudsman will not constitute a breach of any Condition of this Policy. If Underwriters advance Costs and Expenses prior to the final resolution of any Claim then the Firm shall refund such Costs and Expenses to the extent that they were not be entitled to indemnity under this Policy. 3. Arbitration Save as provided in Condition 2, any dispute or disagreement between the Firm and Underwriters arising out of or in connection with this Policy shall be referred to arbitration before a sole arbitrator (to be mutually agreed upon by the Firm and Underwriters or failing agreement to be appointed by the President of the Institute of Chartered Accountants in England and Wales/ of Scotland/ in Ireland as applicable) whose decision shall be final and binding on both parties. Furthermore any dispute or disagreement between any Underwriters or Insurers concerning this insurance shall be referred to arbitration before a sole arbitrator (to be mutually agreed upon or, failing agreement, to be appointed by the President for the time being of the Institute of Chartered Accountants in England and Wales, of Scotland and in Ireland, as applicable, or his mutually agreed nominee) whose decision shall be binding on both parties. 4. Subrogation Underwriters shall be subrogated to all the Firm's rights of recovery against any person before or after any payment or indemnity under this Policy and the Firm, as a condition precedent to their right to indemnity under this Policy, shall take all steps necessary to preserve Underwriters rights of subrogation and shall give all such assistance in the exercise of rights of recovery as Underwriters may require. Underwriters agree not to exercise any such rights against any Insured Person or Employee of the Firm unless the Claim is brought about or contributed to by the dishonest, fraudulent, criminal or malicious act or omission of that Insured Person or Employee. Markel. Com. Act of 17

15 5. Fraudulent Claims If the Firm shall make any request for payment or indemnity knowing the same to be false or fraudulent as regards amount, or otherwise, this Policy shall be void and all payment and indemnity hereunder shall be forfeited. 6. Unintentional Non-Disclosure Clause Underwriters will not exercise their right to avoid insuring clause 1 of this Policy or claim to be discharged from any liability thereunder, on the grounds of any alleged non-disclosure or misrepresentation of facts or alleged untrue statements in the Proposal provided that: (a) (b) (c) (d) the Firm shall establish to Underwriters reasonable satisfaction that such alleged nondisclosure, misrepresentation or untrue statement was free of any fraudulent conduct or intent to deceive; the Premium and terms shall be adjusted at Underwriters discretion to those which would have applied had such circumstances been disclosed; where the Firm should have notified such circumstances under any previous insurance (whether with other Underwriters or Insurers or not) the indemnity hereunder shall be limited to the indemnity which would have been available under the earliest such previous insurance if such circumstance had been properly notified; where the Firm should have notified such circumstances under this Policy prior to obtaining any increase in the limit of indemnity hereunder or variation in the terms hereof the indemnity hereunder shall be limited to the indemnity which would have been available prior to such increase in cover or variation of the terms hereof; 7. Breach Of Condition This clause applies only to a claim for indemnity made under insuring clause 1 of the Policy. Where the Firm s breach of or non-compliance with any Condition of this Policy has resulted in prejudice to Underwriters (a) (b) (c) in the handling or settlement of any Claim against the Firm in the amount of any loss sustained by the Firm in the obtaining of reimbursement from any dishonest or fraudulent person the indemnity afforded under insuring clause 1 (including liability for claimant s costs) shall be reduced to such sum as in Underwriters reasonable opinion would have been payable by them in the absence of such prejudice. 8. Difference In Conditions In any dispute in connection with the terms, conditions, exclusions or limitations of this Policy it is specifically understood and agreed that the terms, conditions, exclusions and limitations of the Approved Wording contained in the Prospectus for Approved Insurers (issued by the Institute of Chartered Accountants in England and Wales, of Scotland and in Ireland, as applicable) in force as at the date of inception or renewal of this Policy, shall take precedence Markel. Com. Act of 17

16 over any terms, conditions, exclusions or limitations contained herein which are less favourable to the Firm. 9. Premium Payment If the Premium has not been paid within 60 days of inception, Underwriters may cancel this Policy by giving 15 days written notice to the Firm or to the Broker. In the event of cancellation, premium is due to Underwriters on a pro rata basis for the period that Underwriters were on risk but the full Premium shall be payable in the event of notification of a Claim or of any circumstances before the effective date of termination. If the Premium is paid in full to Underwriters before the notice period expires, notice of cancellation shall automatically be revoked. If not, the Policy shall automatically terminate at the end of the notice period. 10. Third Party Rights The parties to this Policy are Underwriters and the person or entity named as the Firm in the Schedule. A person who is not a party to this contract has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this contract but this does not affect any right or remedy of a third party which exists or is available other than by virtue of the Act. 11. ICA Clause If the Institute of Chartered Accountants in England and Wales, of Scotland and in Ireland, as applicable, become subrogated to the Firm s rights under this insurance arising from it making a payment to a third party from the Institute Compensation Fund the Institute concerned shall be deemed hereby to rank as a preferential creditor and its claim in so far as the law will allow shall have priority over any other party who may also become subrogated to the Firm s rights hereunder. 12. Proposal Form The Proposal is the basis of this Policy and is incorporated herein. 13. Law Of Contract This Policy shall be governed by the laws of England and Wales. 14. Takeover And Merger In the event of a Change in Control, the Underwriters shall only: provide an indemnity in respect of a civil liability arising from Professional Business conducted prior to the date of the Change in Control; or pay Loss by reason of Wrongful Employment Acts or Management Wrongful Acts committed prior to the Change in Control. Markel. Com. Act of 17

17 Complaints Notices Below are two complaints notices. If you are insured with Markel Syndicate 3000 at Lloyd s please follow the procedure set out in (1) below. If you are insured with Markel International Insurance Company Ltd, please follow the procedure set out in (2) 1. Markel Syndicate 3000 at Lloyd s If at any time you have any questions or concerns regarding this Policy or the handling of a claim, you should in the first instance refer to your insurance broker or intermediary, if any. If your problem cannot be resolved in this way, please write to the Claims Manager, Professional Liability Division, Markel International Limited, The Markel Building, 49 Leadenhall Street, London, EC3A 2EA. We will then advise you of Markel s internal complaints handling procedure. If you are still unable to resolve the situation and wish to make a complaint you can do so at any time by referring the matter to the Complaints Department at Lloyd s. Their address is Complaints Department, Lloyd s, One Lime Street, London, EC3M 7HA; Tel: ; Fax: ; Lloyds-Regulatory-complaints@Lloyds.com Complaints that cannot be resolved by our internal complaints handling procedure or by the Complaints Department at Lloyd s may be referred to the Financial Ombudsman Service. Further details will be provided at the appropriate stage of the complaints process. These complaints procedures do not affect your right to have recourse to legal action or to any other remedy available to you. 2. Markel International Insurance Company Ltd If at any time you have any questions or concerns regarding this Policy or the handling of a claim, you should in the first instance refer to your insurance broker or intermediary, if any. If your problem cannot be resolved in this way, please write to the Claims Manager, Professional Liability Division, Markel International Limited, The Markel Building, 49 Leadenhall Street, London, EC3A 2EA. We will then advise you of Markel s internal complaints handling procedure. Complaints that cannot be resolved by our internal complaints handling procedure may be referred to the Financial Ombudsman Service. Further details will be provided at the appropriate stage of the complaints process. These complaints procedures do not affect your right to have recourse to legal action or to any other remedy available to you. Markel International Limited 2007 Markel. Com. Act of 17